Macroeconomics Answers

The multiplier in the Keynesian model equals:

1.the equilibrium level of income for a given level of aggregate expenditure.

2.the increase in autonomous expenditure brought about by a change in income.

3.the equilibrium level of income divided by autonomous expenditure.

4.the increase in equilibrium income when autonomous expenditure increases.

5.the level of equilibrium output corresponding to a given level of aggregate spending

Use the information in the table below to answer:

CPI Index (Dec 2012 = 100)

Year July August September October

2014 104 106 107 110

2015 112 113 115 116

1. The monthly inflation rate for October is 0.90 %. TRUE OR FALSE?

.2. The annual inflation rate for October 2015 is 5.45 %. TRUE OR FALSE?

Use the information in the table below:

Year Nominal GDP Real GDP

2012 280 290

2013 315 260

2014 305 310

1. The increase in nominal GDP between 2012 and 2014 is:

1.1. -3.5 %

1.2. 19.2 %

1.3. 8.93 %

1.4. 6.90 %

2.The increase in real GDP between 2012 and 2014 is:

2.1. 5 %

2.2. 6.90 %

2.3. 7.14 %

2.4. 20 %

An increase in the demand for US goods imported into South Africa will have the following impact in the South African market:

1. The increased demand for US goods will lead to a decrease in the demand for dollars. TRUE OR FALSE?
2. The demand curve for dollars will shift to the left. TRUE OR FALSE?
3. This means that the rand has appreciated against the dollar. TRUE OR FALSE?
4. As a result of this, export prices in dollars will increase. TRUE OR FALSE?
5. Import prices in rands will increase. TRUE OR FALSE?
6. The volume of exports will increase. TRUE OR FALSE?
7. The volume of imports will decrease. TRUE OR FALSE?
8. The balance on the current account of the Balance of Payments will improve. TRUE OR FALSE?
9. The inflation rate in South Africa will rise. TRUE OR FALSE?

A deficit on the current account of a country's balance of payments can be financed by a surplus:

1. of exports over imports.
2. of net gold exports.
3. on the financial account.
4. on the trade balance.

Consider the case of two (2) countries, China and South Africa, both producing textiles and beer. The table below shows output rates per day in the two (2) countries, if all resources are fully and efficiently employed. 

  Textiles Beer

China 5 10

South Africa 1 6

Which of the following statements is correct?

1. There is no opportunity for mutually beneficial trade between the two (2) countries.
2. China's opportunity cost in the production of beer is lower than that of South Africa.
3. China's opportunity cost in the production of beer is higher than that of South Africa.
4. South Africa should produce textiles only and China should produce beer only and both countries should then trade with one another.

Consider two countries, China and South Africa, both producing textiles and beer. The table below shows output rates per day in the two (2) countries, if all resources are fully and efficiently employed. 

  Textiles Beer

China 5 10

South Africa 1 6

Q1

1. There is no opportunity for mutually beneficial trade between the two (2) countries.
2. China has a comparative advantage in the production of textiles and beer.
3. South Africa has a comparative advantage in the production of beer.
4. The countries will not trade with each other as China can produce more of both goods without trading with South Africa

A tariff is:

1. A tax on exported goods.
2. A source of revenue to the exporting nation.
3. A tax on imported goods.
4. A tax on foreign property.
5. A form of quota.

The demand for passive balances is independent of the level of __________ and dependent on the level of __________

1. interest rate, money;
2. interest rate, income;
3. income, interest rate;
4. Money, interest rate.

The traditional approach to the "supply"of money assumes that there is an independent "supply"curve and that there is no relationship between the supply of money and interest rates. TRUE OR FALSE?